The S&P 500 goes up and the S&P 500 goes down, but recently it’s been more down. Like anything in life, it’s all about risk, and with the NASDAQ composite reaching 5000 and the highest it’s been since the 2000 tech bubble, the markets decided to take a breather.
MrTopStep.com believes that if you’re trading futures, options, or stocks, you have to have a game plan, you have to have rules to trade by. With the S&P futures down 8 out of the last 11 sessions for a total loss of 80 handles between the all-time high and yesterday’s low, we think it’s time to start bargain-hunting.
Over and over again, the market timers call the markets lower, only to see the markets take off and make new all-time highs. Over the last few days the weakness in the euro currency and the strength of the dollar has pushed stocks lower, but we don’t believe that that will last for much longer. Yesterday when the S&P was at or near the lows of the day, the PitBull was concerned about a larger drop. We know that after several days of lower closes the S&P will find a support level, and and after that we should see some type of back and fill pricing action. Yesterday started to look like that was occurring, but after a higher open, the sellers sold every rally all day. The futures had a hard time holding any rallies and bounced off the 2046.50 area several time before the MiM gave an early sell side look and the ESH15 started going down. The MiM started showing $200mil for sale, ended up $396mil for sale and the actual MOC ended up sell $860mil.
In the end the overall tone of the S&P remains weak. Volumes were OK but still not large by any means.
In Asia 9 out of 11 markets closed higher and at 6:00 CT in Europe 8 of 12 markets are trading higher this morning. Today’s economic reports start with the jobless claims number, retail sales, import-export prices, business inventories, EIA natural gas report, 10-year TIPS announcement, 30-year bond auction, Fed balance sheet and money supply. It picked up yesterday and it looks like today could be another busy day.
Switch Day / Rollover Thursday
Our view: I really thought on one of those pushes above 2046 that we could see a rally to 2054- 2056, but the sellers were ruthless. They never stopped selling, and at 2:30PM the ESH15 gapped lower. The weak close carried through on the downside. I have 2030-2035 and then 2020 as my support areas … though there is still a possibility of 1990. That said, I still think we are close to a low and I am still looking for the PitBull Thursday/Friday Low the week before expiration. Our view is we lean to selling rallies and buying weakness.
“S&P Slip & Slide”
As always, please use protective buy and sell stops when trading futures and options.
- In Asia 9 out of 11 markets closed higher: Shanghai Comp +1.78%, Hang Seng +0.34%, Nikkei +1.43%
- In Europe 8 of 12 markets are trading higher: DAX +0.11%, FTSE +0.87%, MICEX -0.24%, Athens GD.AT -0.15%
- Fair value: S&P -9.47 , Nasdaq -10.61 , Dow -93.05
- Total volume: 1.7mil ESH and 5k SPH traded
- Economic schedule: Jobless claims number, retail sales, import-export prices, business inventories, EIA natural gas report, 10-year TIPS announcement, 30-year bond auction, Fed balance sheet and money supply
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